Mannatech Q3 Sales Up 2% To $43 Million

Mannatech, Incorporated (NASDAQ: MTEX), a global health and wellness company committed to transforming lives to make a better world, today announced financial results for its third quarter of 2018.

Third quarter net sales for 2018 were $43.0 million, an increase of $1.0 million, or 2.4%, as compared to $42.0 million in the third quarter of 2017. For the three-month period ended September 30, 2018, our net sales increased 2.9% on a constant dollar basis (see Non-GAAP Financial Measures, below) as compared to the same period in 2017, while unfavorable foreign exchange caused a $0.2 million decrease in GAAP net sales as compared to the same period in 2017.

Income from operations was $1.7 million for the third quarter 2018, as compared to income of $0.7 million in the same period in 2017. Due to taxes, our net loss was $1.7 million, or $0.69 per diluted share, for the third quarter 2018, as compared to net income of $1.4 million, or $0.50 per diluted share, for the third quarter 2017.

For the three months ended September 30, 2018, the Company’s effective tax rate was 167.8% as compared to (58.5)% for the same period in 2017. The effective tax rate for the three months ended September 30, 2018were different from the federal statutory rate due to the mix of earnings across jurisdictions, valuation allowances recorded on foreign losses in certain jurisdictions, and the impact of global intangible low-tax income (“GILTI”) as a result of the Tax Cuts and Jobs Act.

For the three months ended September 30, 2018, Mannatech’s operations outside of the Americas accounted for approximately 69.1% of Mannatech’s consolidated net sales.

Commission expenses for the three months ended September 30, 2018 decreased by 4.5%, or $0.8 million, to $16.8 million, as compared to $17.6 million for the same period in 2017. For the three months endedSeptember 30, 2018, commissions as a percentage of net sales decreased to 39.1% from 42.0% for the same period in 2017 due to the structure of the 2017 Associate Compensation Plan, which was implemented on July 1, 2017.

Incentive costs for the three months ended September 30, 2018 increased by 64.2%, or $0.5 million, to $1.2 million, as compared to $0.7 million for the same period in 2017 due to new incentives in growth markets. For the three months ended September 30, 2018, incentives as a percentage of net sales increased to 2.8% from 1.8% for the same period in 2017.

The approximate number of new and continuing active independent associates and preferred customers who purchased our packs or products or paid associate fees during the twelve months ended September 30, 2018and 2017 were approximately 202,000 and 219,000, respectively.

Recruitment of new independent associates and preferred customers increased 1.6% during the three months ended September 30, 2018 as compared to the same period in 2017. The number of new independent associate and preferred customer positions held by individuals in our network for the three months ended September 30, 2018 was approximately 25,802, as compared to 25,394 for the same period in 2017.

About Mannatech

Mannatech, Incorporated, offers a profound wellness experience that makes a difference in the lives of people across the world. Through its innovative Glyconutrition products, Mannatech changes lives, providing an unprecedented level of natural wellness, freedom and purpose.

With more than 20 years of experience and operations in 26 markets, Mannatech is committed to changing lives. For more information, visit Mannatech.com.